A report submitted by the Vigilance Bureau (VB) of the Chandigarh Police has brought to light an alleged nexus between a nationalised bank and a commission agent that caused heavy losses to the Punjab State Electricity Board (PSEB). For getting a loan of Rs 300 crore from the Panjab National Bank (PNB), Mall Road, Patiala, the PSEB paid Rs 1.62 crore as commission charges to one M/s A K Capitals Pvt Ltd.

It was in response to a public interest litigation filed by advocate H C Arora that Superintendent of Police (VB) Inderjit Singh Randhawa submitted a report making the startling revelations. In the PIL, Arora had referred to a Comptroller and Auditor General (CAG) Report for the year ending March 31, 2007, alleging that the PSEB had raised a loan from the PNB through “arrangers” by paying a huge commission.

The electricity board had accepted the offer of A K Capital Services Limited on September 2005 and had paid them Rs 1.62 crore on December 26 the same year. The said loan was, thereafter, disbursed to the PSEB on January 9, 2006. The report submitted by the Randhawa has been retained by the Bench for passing appropriate directions.

In a status report filed separately, Randhawa stated, “The inquiry has been completed and it was transpired that there is a connivance between nationalised banks and loan arrangers. If government undertakings approach the banks for loans directly, they are burdened with higher interest rate and also a delay. This, perhaps, to force government institutions to approach banks through loan arrangers who help get the loan at lesser interest rates, in return of commission fee.”

Randhawa further stated: “The report was examined and it has been recommended to take departmental action against suspects. The matter has been referred to Principal Secretary, Punjab Government, Electricity Department (Energy Section), Chandigarh (Administrative Department) to look into the matter at the department level and take action accordingly.

Far from being impressed, Chief Justice Tirath Singh Thakur had several queries for PSEB’s counsel. “Why cannot your MD speak to the bank over telephone?” What special logic could the brokers have given to the bank, which your own officers could not give?” the Bench asked.

The Chief Justice observed, “It is beyond our comprehension as to why a government organisation should engage middlemen for getting a loan from another government bank? We thought banks chase customers for giving loans. It is surprising the Board has given a huge fee to middlemen for getting a term loan.”

When the Court asked Arora to suggest as to which agency should investigate the case, Arora sought a probe by the Central Bureau of Investigation.